Death By 40,000+ Programmatic Cuts

One of the big takeaways from today's just-released second edition of the Association of National Advertisers' (ANA) programmatic supply chain report is that, less very well may be more. More precisely, when it comes to buying programmatic media, dramatically less suppliers will lead to much, much more of a return on their programmatic ad spending.

According to my math, the ANA is recommending media buyers should only work with 0.0025% of the programmatic suppliers they currently do business with.

"Media buyers currently using an overabundance of websites (40,000-plus) should select 75-100 trusted programmatic media sellers that will provide access to thousands of high-quality websites to optimize their investment," is one of the top recommendations the ANA makes in the new report, which is a follow-on to an earlier one analyzing findings of its the in-depth "Programmatic Media Supply Chain Transparency Study" conducted over the past several years.



There are a number of reasons why the ANA is recommending that media buyers massively reduce the number of suppliers they work with, not the least of which is the complexity of the marketplace, and the fact that it's fundamentally impossible for buyers to manually track what actually happens with 40,000-plus suppliers being bought programmatically.

I'll drill into some of those reasons in future columns, because like the programmatic marketplace, the ANA's study and reports shedding light on it, also are complicated.

But aside from having greater manual oversight of a manageable number of "trusted" suppliers, there is a real bottom line consequence: the share of programmatic advertising budgets that actually ends up as working media dollars.

Needless to say, there have been many analyses estimating the share of programmatic ad buys sucked up by extraneous fees and/or overhead costs as the buys make their way over the waterfall, but based on the new ANA findings, only 36 cents on the programmatic ad dollar actually reaches a consumer.

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